nuffnang

Saturday, November 22, 2008

Economy is good with low oil prices

Benchmark crude fell as low as $48.50 a barrel on the New York Mercantile Exchange, levels last seen on May 18, 2005, their lowest levels in almost four years, as the market focused on the threat of a global recession and tumbling energy demand.

Is oil the root of all evil? After all, economy is good with low energy prices until proven otherwise. The interest is international which is sustaining the sustainability of the economy.

One thing that has been made very clear is that the sentiment of consumers and investors had been hammered by an unrelenting series of bad economic data in the US due to the surge in oil prices, the world’s biggest energy consumer.

Governments, businesses and consumers have slashed energy expenditures, which has halved the price of crude since record highs in July.

US motorists, stung by record gasoline prices, job losses and falling home prices, left the roadways in droves. The Federal Highway Administration reported Wednesday that Americans drove 10.7 billion fewer miles in September 2008 than a year ago, the 11th straight monthly decline.

The oil fell below as low as $48.50 a barrel also reflects that demand will be affected not only in Western countries but in China and India, whose rapid growth was also a major force pushing prices to record highs earlier this year.

Japan, the world's second-largest economy is now joins the 15-nation euro-zone in recession, defined as two straight quarters of GDP contraction. For the first time since 2001, gross domestic product contracted at an annual pace of 0.4 % in the third quarter after a shrinking 3.7 % in the second quarter.

In the wake of the economy devastating destruction caused by the evil oil is by far unforgettable and unforgivable. Domestic and global pressures existed will lead at last to greater energy independence and automobile manufacturers to tout new, cleaner-greener technology or alternative energy.

Ironically, the car industry ought to build cars that use less gasoline and governed by rules that raise the fuel-efficiency standards on cars through existing technology-making more fuel-efficient automobiles or replace the use of oil.

The world has only two ways putting ahead, invest in the whole research and development chain through to commercialization to bring down costs for these new technologies and dependency on oil. Or still depending on the conventional technologies pay the cost of economy and political destruction.

How the world has wrongly presented space and military technologies. The priority concentration of effort put on space technology is by far unjustified and being taken advantages or abused of, instead economy.

The wind, solar and geothermal industries at last are growing by leaps and bounds around the world which serves perhaps the best source and effective alternative energy.

Philippines, for instance, generates nearly one-fourth of its electricity from geothermal energy. By 2013, the country intends to increase its installed geothermal capacity by 60 %. And China has already surpassed its recent 2010 goal for installed wind capacity.